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situation as that described above. Supposing, as we have just done after him, a reduction of the rate of discount to three-fourths of one per cent., he then asks, as we do, what the result would be. These are his words in answer to Bastiat, the "Basis" of that discussion :

The fortune and destiny of the country are to-day in the hands of the Bank of France. If it would relieve industry and commerce by a decrease of its rate of discount proportional to the increase of its reserve; in other words, if it would reduce the price of its credit to three-fourths of one per cent., which it must do in order to quit stealing,—this reduction would instantly produce, throughout the Republic and all Europe, incalculable results. They could not be enumerated in a volume; I will confine myself to the indication of a few.

If, then, the credit of the Bank of France should be loaned at three-fourths of one per cent., ordinary bankers, notaries, capitalists, and even the stockholders of the bank itself would be immediately compelled by competition to reduce their interest, discount, and dividends to at least one per cent., including incidental expenses and brokerage. What harm, think you, would this reduction do to borrowers on personal credit, or to commerce and industry, who are forced to pay, by reason of this fact alone, an annual tax of at least two thousand millions?

If financial circulation could be effected at a rate of discount representing only the cost of administration, drafting, registration, etc., the interest charged on purchases and sales on credit would fall in its turn from six per cent. to zero,—that is to say, business would then be transacted on a cash basis; there would be no more debts. Again, to how great a degree, think you, would that diminish the shameful number of suspensions, failures, and bankruptcies?

But, as in society net product is undistinguishable from raw product, so in the light of the sum total of economic facts CAPITAL is undistinguishable from PRODUCT. These two terms do not, in reality, stand for two distinct things; they designate relations only. Product is capital; capital is product: there is a difference between them only in private economy; none whatever in public economy. If, then, interest, after having fallen in the case of money to three-fourths of one per cent.,—that is, to zero, inasmuch as three-fourths of one per cent. represents only the service of the bank,—should fall to zero in the case of merchandise also, by analogy of principles and facts it would soon fall to zero in the case of real estate; rent would disappear in becoming one with liquidation. Do you think, sir, that that would prevent people from living in houses and cultivating land?

If, thanks to this radical reform in the machinery of circulation, labor was compelled to pay to capital only as much interest as would be a just reward for the service rendered by the capitalist, specie and real estate being deprived of their reproductive properties and valued only as products,—as things that can be consumed and replaced,—the favor with which specie and capital are now looked upon would be wholly transferred to products; each individual, instead of restricting his consumption, would strive only to increase it. Whereas, at. present, thanks to the restriction laid upon consumable products by interest, the means of consumption are always very much limited, then, on the contrary, production would be insufficient; labor would then be secure in fact as well as in right.